Q3 revenue beats estimates, net profit falls due to one-time charge
Financial services, energy segments lead growth
Raises revenue forecast on strong deal wins, pipeline
Tech spends that can't be postponed helping recovery, says analyst
Updates share levels in paragraph 2
By Sai Ishwarbharath B and Haripriya Suresh
BENGALURU, Jan 14 (Reuters) - India's No. 2 software services exporter Infosys INFY.NS unexpectedly raised its revenue forecast on Wednesday and signaled a healthy demand outlook, citing steady discretionary tech spending and renewed momentum in its core financial services business.
The forecast lifted its U.S.-listed shares 10% in early trade and came just two days after market leader Tata Consultancy Services TCS.NS flagged strong demand in 2026, pointing to a possible rebound in India's $283 billion IT sector.
Clients who had cut discretionary spending amid tariff-related uncertainty are now funding AI projects.
AI DRIVES RECOVERY HOPES
"There is an industry-wide recovery as certain tech spends can't be postponed beyond a point. It's this incremental improvement in demand that is helping the industry on a gradual recovery path," said Centrum Broking analyst Piyush Pandey, who called Infosys' forecast revision a "positive surprise".
For the fiscal year ending March 2026, Infosys said it expects revenue growth of 3% to 3.5%, versus its own earlier estimate of 2% to 3%.
Three brokerages had expected the company to narrow the range to 2.5%-3%.
"We have become (the) AI partner of choice for (the) largest clients in financial services and energy (sectors). Therefore, we see a good outlook even as we look into the next financial year," CEO Salil Parekh said in a post-results press conference.
Peers Tata Consultancy Services TCS.NS and HCLTech HCLT.NS beat revenue estimates on Monday and also talked of AI-led demand.
Third-quarter revenue for Infosys rose 8.9% to 454.79 billion rupees ($5.04 billion), beating the LSEG-compiled average analysts' estimate of 452.27 billion rupees.
Revenue from the financial services segment, which accounts for nearly a third of sales, increased 3.9%.
Infosys, which won AI-led deals with Adobe ADBE.O and Siemens AG SIEGn.DE in 2025, did not disclose revenue from AI projects. Last month, Accenture ACN.N beat first-quarter revenue estimates on strong demand for AI-driven IT services.
Net profit for the reported quarter fell 2.2% to 66.54 billion rupees, missing the average estimate of 73.79 billion rupees on a one-time charge of 12.89 billion rupees linked to India's new labour codes.
Large order bookings, defined as deals above $50 million, rose to $4.8 billion from $3.1 billion in the previous quarter and $2.5 billion a year earlier.
($1 = 90.2990 Indian rupees)
(Reporting by Sai Ishwarbharath B and Haripriya Suresh in Bengaluru; Editing by Dhanya Skariachan and Nivedita Bhattacharjee)
((saiishwarbharath.b@thomsonreuters.com;))
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